GROUP 6

UNFAIR
SPECIFICATI
ONS
DETERMINING WHETHER A CONTRACT TERM IS UNFAIR
 MEANING OF
‘UNFAIR’
• NOT BASED ON OR
BEHAVING ACCORDING
TO THE PRINCIPLES OF
EQUALITY AND JUSTICE
• UNKIND
• INCONSIDERATE
• UNREASONABLE
 UNFAIR
SPECIFICATIONS
• CAUSE A SIGNIFICANT IMBALANCE IN THE
PARTY'S RIGHTS AND OBLIGATIONS

• NOT BE REASONABLY NECESSARY TO PROTECT

THE LEGITIMATE INTERESTS OF THE PARTY
ADVANTAGED BY THE TERM

• CAUSE FINANCIAL OR OTHER DETRIMENTS

(SUCH AS DELAY) TO A PARTY IF IT WERE
RELIED ON.
 A business establishment enters into a two-year waste management
contract. The agreement provides that the supplier may terminate the
agreement at any time by giving the small business 30 days’ notice.
Another term of the agreement provides that, if the agreement is
terminated, the small business must pay the supplier damages equal to the
EXAMPLE service fees for the remaining period of the agreement.
RIGHT TO TERMINATE
1
WITHOUT CAUSE WITH
LIQUIDATED DAMAGES
The term requiring the business establishment to pay damages
is likely to raise concerns as it allows the supplier to effectively
penalize the business in the event of termination, even if the supplier
terminates without cause. Such a term is unlikely to be necessary to
protect the supplier’s legitimate interests.
 A small business enters into a contract to provide architectural services
to a larger business for a particular project. The contract contains a term
that requires the small business to indemnify the larger business against all
loss and damage arising in relation to the project, including loss or damage
caused by the larger business.
EXAMPLE This specification is likely to raise concerns as such a wide
WIDE INDEMNITY
2 indemnity creates a significant imbalance between the rights and
obligations as between the parties and does not appear to be
reasonably necessary to protect the larger business’ legitimate
interests.
 An engineering firm enters into an agreement with a larger
business to lease equipment for one month. The agreement provides
that if the engineering firm damages or loses the equipment, it will
be required to pay 50 percent of the amount that would have been
paid to the larger business for leasing the equipment for the next five

EXAMPLE years. This amount is more than the cost of purchasing new
equipment.
LIQUIDATED DAMAGES
3 This term is likely to raise concerns as it imposes an unfair cost
on the firms that do not appear to be reasonably necessary to protect
the larger business’ legitimate interests.
EFFECTS OF UNFAIR SPECS

SUSPICIOUS OF
DOUBTFUL THE TREATMENT
CONTRACTING WHICH HE WILL
ACTUALLY
PARTIES
RECEIVE
 TRANSPARENCY CLAUSE REQUIRING ANY DISPUTE TO GO TO
ARBITRATION (A COMPULSORY ARBITRATION
expressed in reasonably plain language and CLAUSE)
legible
presented clearly
READILY AVAILABLE TO ANY PARTY
AFFECTED

PREVENTIN RNING OF SOME RIGHT OR INTEREST ON THE

G UNFAIR
LAND TITLE) ON THE BUILDING SITE LAND

SPECIFICATI THE EXPRESSION ‘PRACTICAL COMPLETION.

IF YOU FIND IT IN YOUR CONTRACT, DELETE
REMOVE ANY STATEMENT THAT RESTRICTS
OR DENIES YOUR RIGHTS TO IMPLIED

ONS
IT AND INSERT ‘COMPLETE IN ACCORDANCE WARRANTIES (SEE BUILDING WARRANTIES
WITH THE PLANS AND SPECIFICATIONS. AND INSURANCE)
THANK YOU!